By now you know that leads are imperative to sales and moving your business forward. But not everyone truly understands where leads come from or how leads work, which can impact how you work with them and generate them in the long run.
So: how do leads work? How do you get people online and become a lead? Where do leads that you buy come from?
In this post, we’re going to dive into the details of these questions and their answers. Let’s get started!
A General Example for a General Understanding
First and foremost, we think the easiest way for you to kind of understand how internet leads are created and given to you is to look at something you’re familiar with.
Let’s look at what that customer experience is. For the sake of this example, let’s pretend that you’re a customer looking to get a mortgage, or maybe you want to get some sort of house insurance product.
You end up on some websites like Progressive or Geico, for example, where you’re prompted with a form to fill out that gives your email and phone number.
And that is a lead for that company. When a customer goes to any of those types of pages and fill out the form or give information somehow, that is the initial inquiry that will ultimately become a lead. That data will be loaded into a spreadsheet or directly into your CRM so you can use that info to nurture those leads.
When you’re looking for a customer to become a lead, they fill out that form with all of that information. There’s more to this than just that, though.
When a consumer submits the form, usually at the bottom of the form is a series of things that they opt into. That terms of service or opt-in section agreement section is usually fairly complex if you were to actually click through it.
A lot of times they have a whole list of companies, that they’re allowed to share the information with. There are some legal caveats allowing them to share the information, which can spread these leads to other companies, like when a company purchases leads.
What information the consumer gives and what information that’s allowed to be shared will be very specific to the form that they fill out, which is where it becomes specific to the industry and the company you’re working with.
If you want to know the hard specifics of where your leads are coming from, that’s a question that you should ask your lead provider.
Getting the Information
While the specifics on where bought leads (or any leads, really) come from will vary fairly widely depending on how that lead was first acquired. Once you go into the system, so to speak, then whoever that lead generator is has certain parameters that they are allowed to use in order to share or sell that lead out.
Another factor is that there are consumer expectations that have been set on the front end of marketing material.
Think about a time you’ve filled out your information on something like this. Oftentimes these forms will say something like, “Hey, the value of filling out this form is that multiple lenders or multiple insurance providers will contact you to help you shop and make it easier for you to compare. They’ll send you a bunch of rate quotes and offers.”
This helps the consumer see that it’s good that their information (aka them as a lead) is shared with a variety of companies because it will benefit them in some way. This will also help simplify that process because we’ve got all those lenders, all those providers, waiting to give you an instant quote once they get these Internet leads.
That’s what gives these organizations the sort of the authorization and the expectation from the consumer that their information will be provided to multiple providers, which also generates leads for those providers.
Once the lead is given to these sorts of organizations/providers, they take that into their database, they look at it as it comes in in real time, and they look for everybody in their network, and send those leads out based on certain filters, qualifications, and information given in the fill form.
For example, let’s say a lead has said in the form that they want a mortgage for X amount in California. When a lead comes in, the organization can then use their technology to match the characteristics/filters that the customer with the providers who are looking for that type of lead. This benefits the consumers since they’re looking for something specific and it benefits the companies getting the lead since it’s the type of lead they’re looking for.
Weeding Out the “Unhappy” Leads
Of course, once the lead is sent out to the various providers, the providers are going to pounce. They’re going to take that lead and try to give them the best offer of what they’re looking for and beat out any competition that also received that lead.
This is important from your sales process. All of these competitors are going to call and email this lead pretty instantly, especially as more people are using automation to contact internet leads.
While it’s important to contact the lead and get your voice in, think about this from the consumer perspective. This can be a bit overwhelming and lead to a few negative reactions.
First, they might say, “Hey, I didn’t fill anything out, why are you contacting me,” in order to just get rid of you. Or, they just won’t answer to avoid the aggressive nature of these types of salespeople.
This is often the result of people not really understanding what they’re signing up for. They know they’re getting some value from being contacted by various providers, but once these providers latch onto them as a lead, they become overwhelmed. They think it will be more informative for them rather than an opportunity to be sold to.
We’ve experienced this before. One thing we notice is that a lot of people say something along the lines of, “I thought I was getting something else,” or, “I was just doing that in order to get whatever I could get online, but I didn’t want anybody to call me or contact me like this.” This serves to brush you off as a salesperson and shows that they didn’t really understand what they signed up for as they get barraged by calls and emails.
And that, understandably, is their natural reaction. However, most people do know that they’re giving their information and they did expect calls, but perhaps just not as many and not in such an overwhelming way. Usually, if you are able to track them down and really get the opportunity to talk with that client, you would kind of find out that, yes, they did give the information.
Think about it: the only way to get their information in this context of internet leads is if they gave their information out. But, this is a very common objection, and it’s okay. Never debate or argue with the customer; try and have a real and extended conversation with them instead of bombarding or arguing with them.
If they’re insistent, simply say sorry and offer to take them out of the database and make it a quick conversation, because obviously there’s no sale to be made there and you’d just be wasting your time.
After the Initial Contact
So at this point, the information from the consumer has been collected, matched with some real-time providers, and the lead has been contacted.
After this, though, we see that something interesting happens. Data shows that between 75 and 80 percent of salespeople after that first initial interaction abandon the lead. This is often because they don’t have a lead follow up system in place or a CRM that allows them to effectively follow up.
So people will get all this information, it doesn’t go anywhere after the first interaction, and they then either lose track of the information or the salesperson loses interest.
While this is not effective for those who abandon leads, it does give you a lot of opportunity to keep up with your follow up and continue with that lead after the majority of other providers “give up”.
Gaps in the Market Create Aged Leads
There’s another category that’s interesting, too. Let’s say when that customer gives their information that there’s an expectation and an authorization that their data will be provided to five providers.
But what often happens is that you’re authorized or set an expectation with the consumer that you’re going to share this information with five providers but you can only find three that match the filters. There are little gaps in the market where there just aren’t enough providers for certain categories of leads. This could be because they’re not as attractive, easy to work, or are just sort of isolated.
So you’ve got three of the five leads here, that consumer’s data, that lead, hasn’t been fully monetized. And as soon as a short period of time goes by after the information was given, those two other “legs” as they’re referred to in the lead industry can no longer be sold as real-time leads since that time has passed.
As these “missing” legs of a lead accumulate over time, they can start becoming aged leads. Over time, this creates a sort of additional market. A secondary market of leads that allows for lead brokers or secondary market brokers to come in and use them.
However, there needs to be a bit of strategy with how they price these types of leads.
Overall, they’re worth less compared to those initial real-time leads because they are older and they’re harder to work. So, it takes more time and effort to work them and convert them into sales. However, many individuals and organizations are willing to take the aged data knowing and understanding that it’s going to be harder to work. But, they’re willing to exchange my time and effort for the lower dollar amount.
Leads Without Consumer Intent
There’s this whole other category of data that exists that is markedly different from internet leads in the sense that generally for compiled consumer data there is no consumer intent. This category is when the consumer didn’t actually provide that data. Instead, it’s actually compiled by collecting their information from a variety of different sources.
Sometimes this consumer data can update, verify, and add information that was provided by the consumer and they’ll layer that in or append that to their data records and they’ll build a very robust profile on each and every individual consumer in America.
If you’re working with a consumer data provider, there’s a fair amount of limitations on how you work with those leads, especially considering that the consumer is not necessarily involved or providing that information directly.
This can be a little less accurate, too, because the information is being assembled from third-party sources and could potentially not be entirely correct.
The Internet Lead Ecosystem: Wrapping Up
Hopefully, that’s walked you through some of the details and given you a little bit of a clear insight as to where Internet leads come from and how the lead ecosystem works. When you get that next lead, whether it’s real-time or it’s consumer data or it’s aged leaves and it’s actually on your screen and your CRM, try to think through what has this consumer potentially experienced and how that affects your interactions with them.
How can you give them a better sales interaction? How can you be empathetic of what they’ve gone through when you (and many others) contact them?
It can even be helpful to let them know that you understand the type of experience they’ve had. Something like, “Hey, I know a couple of people have called you at this point and I know you were looking for a mortgage quote a couple of months ago, are you still interested,” etc. Using that sort of language and understanding of this process for when you approach that lead can give them a more familiar and trusting experience.
We know that this general overview probably generated a ton more questions, so please don’t hesitate to reach out and ask!
Speaker 1: (00:00)
Hey aged store fans. This is bill rice. And again, uh, and today I want to answer another question, um, that I get asked a lot. Uh, and that is sort of how to leads work. Um, how do they actually have people get online and become a leaf? So we’re going to drill into that with a lot of detail today. Stay tuned. We’ll see you here in a sec.
Speaker 2: (00:36)
Speaker 1: (00:36)
okay. Like I mentioned in the intro, we’re going to talk today about sort of how a lead becomes [inaudible] a lead. Um, and before I actually dig into the details of sort of the lead ecosystem as I describe it, um, which I think will give you a lot of insight and the whole reason that I’m doing it today is to give you insight into sort of where these customers come from and what they’ve experienced so that you can build a better sales process, uh, when you do approach them. So this, um, uh, can apply to real-time leads as well as age leads or, or kind of really any sort of consumer data. Cause I’m going to try to, as best I can, sort of break these up into different categories of leads and give you a little bit of a behind the scenes picture as to how they come about.
Speaker 1: (01:23)
Now. Huge caveat here and just a disclosure disclaimer, uh, whatever you want to call it. Uh, before I get started, what I’m describing here, uh, today in all cases is sort of a general understanding of how the lead ecosystem and sort of how the internet lead generation process works. It does not necessarily apply anything that I say here does not necessarily apply to any particular lead that you buy from a lead provider of any sort. So, um, the disclaimer and the caution that I would ask you, um, to do is whenever you’re buying leads from a lead provider, um, all of these pertinent questions as to how the lead was generated, where it comes from, uh, how old it is, how many times it was sold to someone, all of those questions are, are questions that you’re going to have to ask one-off to whoever that lead provider is.
Speaker 1: (02:20)
Because it will vary widely and greatly depending on who your lead provider is. Um, and I’m not going to be able to give you the perfect answer and the correct answer for your, any particular lead that you bought. Okay. So with that said, I’m just going to give you sort of a general understanding of how leads work. So the, I think the best way, I think I’m going to probably try to, uh, create some graphics, uh, or something or an infographic around this because I think visuals are important here. Uh, but I wanted to hop on the camera and just kinda give you a little bit of an overview. Um, okay. So first and foremost, I think the easiest way for you to kind of understand, um, how internet leads created a is to goes to something that we’re probably all familiar with. Either go a to Zillow or to a lending tree.
Speaker 1: (03:06)
And again, nothing I say describes their particular process, but it’s kind of an easy place on the internet to go. Um, sort of look at, uh, what that customer experience is. So pretend that you’re going to get a mortgage or maybe you want to get some sort of insurance product, a product, you can go to any of these progressive, Geico, uh, anything that sort of lands on a website and has you fill out a form cause fundamentally all leads, um, start as a form fill or a phone call. So if you go to any of those type of pages, um, inherently they are marketing companies or engines creating the leads. So whenever you see that form or you see a phone number there, um, that is the initial inquiry that will ultimately become a lead or that data that you get in a spreadsheet or get loaded in directly to your CRM that has the name and the phone number and all that sort of thing.
Speaker 1: (04:04)
So when you’re looking at that, um, essentially for a customer to become a lead, they actually fill out that form with all of that information. Um, and then when they submit, usually at the bottom of the form and you can see this, um, there are a series of things that they opt into. Um, and usually that little, um, sort of terms of service or opt in section is fairly complex if you were to actually click through it. Uh, so a lot of times they have a whole list of companies, uh, that they’re allowed to share the information with. There’s some legal caveats, um, allowing them to share the information. Uh, you as a consumer if you were to fill that out or giving permission for all kinds of different contact methodologies. So making a phone call, um, sending emails, uh, maybe people have added in text message there.
Speaker 1: (04:58)
Uh, and again, it will be very specific to the form that you fell out, um, as to what you’re agreeing to on the back end as a consumer, as to where your data could potentially be shared. Um, I E sold as a lead, uh, and the types of contact methodologies that you are authorizing, whoever buys that lead to do. So. That’s again, why I say it becomes very specific. Um, and a question that you should ask your lead provider. Um, what all is involved in those, because they do vary fairly widely depending on how that lead was first acquired. So once you go into the system, uh, so to speak, uh, then whoever, uh, that lead generator in has certain, um, parameters, uh, that they are allowed to use in order to share that lead out or to sell that lead out. There are also certain consumer expectations that they’ve set on the front end of their marketing material.
Speaker 1: (05:54)
So oftentimes they say, uh, Hey, value proposition of filling out this form is that multiple lenders or multiple insurance providers a will contact you, um, and help you to shop, make it easier for you to compare because they’ll send you a bunch of rate quotes or offers or those sorts of things. Um, and so we’re simplifying that process because we’ve got all those lenders, all those providers, all those, um, solar installers on the back end, uh, waiting to give you an instant quote and allow you a very efficient way, uh, to sort of compare offers. So that’s what gives these, um, organizations, the sort of the authorization and the expectation from the consumer, um, that their information will be provided to multiple providers. Um, and so at that point, depending on what this is, usually it’s somewhere between three to five, uh, different providers, uh, that they’ve set an expectation that Hey, you’re going to get multiple offers.
Speaker 1: (06:50)
So it sort of falls in that range. Um, and so they take that into their database, they look at it as it comes in, in real time, and they look for everybody in their network, all the providers that have given them certain filters. Right. Um, and so as it pertains to real time, cause we’re kind of at that phase of the ecosystem as it, uh, appeals to real time leads. People have said, Hey, I want a mortgage refi [inaudible], uh, over 200,000 in California. So when a lead comes in, uh, they’re very quickly with their technology trying to match the characteristics of that customer with the providers that would like that type of lead. So that’s done very quickly. Um, and then it is provided directly to whoever sort of qualified or met the standard of that filter. And then the mortgage provider, the solar installer or the insurance agent gets that lead, uh, in a, in a way that’s very consistent with the type of leads that they ask for.
Speaker 1: (07:52)
Okay. So that’s kind of the first phase. And of course then those three or four go out into the world and all those people, uh, and this is important from your sales process. What happens, you know, all three to five of those people jump on that lead. They all call and they probably all email like instantly. Um, and a lot of times they have automated systems and that sort of thing. So sometime from the consumer perspective, that can be a little bit overwhelming. And so a lot of times, uh, consumers will do a couple things. They’ll say, Hey, I didn’t fill anything out just to get rid of you. Um, or they’ll say, ah, they, they just won’t answer because the first one, maybe you got a sales person on there that was kind of aggressive and they’re like, wow, I don’t like this experience.
Speaker 1: (08:35)
I tried it, but I don’t want to do that. And I stopped answering their phone anymore. And so that’s kind of some of the experiences of real time. The other thing I will tell you, um, is sometimes, uh, people, uh, because they don’t always understand kind of the internet and what they’re signing up for. Sometimes they’ll literally legitimately say, I didn’t ask for, um, any sort insurance quotes closer, those sorts of things. And so in their mind, um, they often are saying, Hey, I thought I was getting something else, or, no, I was just doing that in order to get whatever I could get online, but I didn’t want anybody to call me again. Uh, usually when you hear that on the phone as a salesperson, what’s happened is the person’s either trying to brush you off, um, truly didn’t kind of understand based on kind of the way it was set up, um, that they were going to get barraged by calls.
Speaker 1: (09:24)
And so that’s kind of their natural reaction. Um, in a very, very few cases cause mostly providers are not unscrupulous, but in some cases, ah, the experience was a little bit tricky when they grabbed that information. Um, and the, the consumer truly might not have thought they were going to get calls. Um, but that’s, it’s usually a very small margin. Um, usually if you were to track down or you were to really get the opportunity to talk with that client, uh, over an extended period of time, you would kind of find out, yeah, they did give the information. Cause truly if you think about it, um, there’s really no way to get their information in that particular context as a lead now unless they type it in. Um, and so again, just to kind of go through a very common objection, uh, it’s okay. I would never debate or argue with the customer, but I have had some extended conversations and usually you can kind of drill, uh, to a point where, yeah, no, I actually filled the form out but I don’t really want to talk to you.
Speaker 1: (10:21)
So, um, so that’s just I guess good context if I was, when I’m actually working these kind of leads. Uh, like I said, I never debate with them. I’m like, okay, sorry. Thank you. We’ll take you out of the database and make it a quick conversation cause obviously there’s no sale to be made there. Okay. So at this point we’ve collected the information from the consumer, we’ve matched it with some real time providers. Uh, we’ve put that into their sales hands. They’ve actually, uh, aggressively kind of got on that lead. Um, and then, uh, something kind of interesting happens. Uh, and we see this through data. Probably 75, maybe even 80 or higher percentage of those people that receive that original lead. Um, after that first, uh, interaction, they just kind of abandoned it. And usually this is because they don’t have a CRM or a system in place to allow them to kind of effectively follow up.
Speaker 1: (11:13)
So they get all this information in here and you know, if it doesn’t happen the first time, there’s a good chance that they lose track or just as a salesperson lose interest. So it’s just a lack of discipline there. Um, but that gives a lot of opportunity, um, for this next category of leads. So, uh, what happens after that is usually a, the person, the consumer, uh, is either gets what they’re looking for relatively quick or lacks in on a particular person that’s going to help them and they go through the process and, and are perfectly happy. Um, or a lot of them kind of shut down because they are overwhelmed or surprised by that process if they’ve never gone before it. And they’re, you know, most people don’t like conflict and so sales always feels confrontational and unlike a conflict. And so, uh, they sort of want to avoid that.
Speaker 1: (12:01)
So they kind of shut down. And then there’s this other category of experience where, um, if there is an expectation and an authorization for the consumer to provide their data to multiple providers, um, maybe somewhere in that three to five range, let’s just say it’s five. Um, so in the lead industry, there’s this concept called legs of a lead. So if I am authorized or a set, an expectation with the consumer that I’m going to share this with five providers. Okay. Um, but I can only, when I match it up, I can only find three, uh, that matched the filters. And that happens a lot. There’s little gaps in the market where they just don’t have providers for certain categories of leads. Um, either they’re not as attractive or easy to work or just sort of isolated geography. And there’s a whole lot of reasons why there might not be a match.
Speaker 1: (12:53)
So you’ve got three of the five legs here, uh, in order to fully monetize, uh, that, uh, the consumer that leads, right, because they spent a lot of money to market and get those five leads and, uh, are that one lead that they turn into five sales. Um, if they have this situation where they’ve only got three matches to five, they haven’t fully monetized that lead. Right? And as soon as, uh, you know, a short period of time goes by, um, those two other li legs can’t be sold as real-time leads, right? So you start to accumulate this massive amount of data that is aged or aging in the real time lead providers database. So, um, over time there has become a, this sort of additional, um, market, if you will, the secondary market of leads that it, that allows for brokers, lead brokers or secondary market brokers to come in.
Speaker 1: (13:57)
Um, and to cause li cause real-time. Uh, folks, the, the leads are worth less. They certainly don’t want to compete with their price. If they’re selling something for 18, 25 bucks here, uh, they don’t want to give an alternative that is aged. Uh, that’s only like a buck. Right? So that would on their pricing chart would create sort of a real sort of disincentive for you buying these realtime leads for all kinds of different reasons. So created sort of the secondary market of individuals and organizations, uh, that can sell, um, this aged data. And so they essentially broker, uh, based on their, um, providers request to have this age, uh, data and say, Hey, I’m willing to, um, take, uh, this age data and I know, uh, understand that it’s gonna be a little bit harder to work. Uh, but for the price differential, I’m willing to exchange my time and effort, uh, for the dollars.
Speaker 1: (14:53)
Um, and even potentially not competing with these kind of highly technical, instant sort of response people. And so that’s created this secondary market of aged leads. And so there’s a category there. There’s another thing that happens to that type of data as well. Um, is there’s this whole other category of data that exists that this consumer, uh, data and what consumer data is, um, is markedly different from internet leads in the sense that generally for consumer data, there is no, um, consumer intent. So the consumer didn’t actually provide that data, uh, to the consumer data provider. The consumer data, uh, provider organization is actually collecting information from a variety of different sources. And connecting it, uh, to an individual that they have in their database. So sometimes these consumer data will actually leverage some of this age lead to get sort of updated and verified information that was provided by the consumer and they’ll layer that in or append that to their data records and they’ll build a very robust profiles on each and every individual consumer in America.
Speaker 1: (16:05)
And so that’s kinda how that part of the ecosystem works. So if you’re working with a consumer data provider, um, there’s a fair amount of limitations on that as well because the consumer is not necessarily involved or authorizing or opting in or providing, um, that information directly. So it can be a little less accurate because it’s being assembled from third party sources. Um, and there’s potentially, um, no, uh, opting in or providing a permission by the consumer, uh, for certain types of use of that data. So hopefully, uh, that’s walked you through some, a little bit of a clear insight as to kind of how this lead ecosystem, um, all fits together and works. Uh, and most importantly, as you kind of listen through this video, think about, um, when you get that next lead, whether it’s real time or it’s consumer data or it’s aged leaves and it’s actually on your screen and your CRM, try to think through what has this consumer potentially experienced.
Speaker 1: (17:08)
Um, and how can I give them a better sales interaction? How can I be empathetic of what they’ve gone through? Understanding of that. Maybe even letting them know that I understand maybe sort of the, uh, the type of experience they’ve had. Hey, I know a couple of people have called you at this point, or I knew you were looking, uh, you know, for an insurance quote a couple months ago, are you still interested, you know, again, using sort of language and understanding of this process, um, to when you actually approach that lead, give them a more familiar and trusting experience that you truly kind of know who they are, uh, in the path of the journey that they’ve been on. So, again, hopefully, this helps. Uh, I know this is to generate a ton more questions, so please go down in the comment section and ask me any questions.
Speaker 1: (17:54)
And I as always do my very best to give you a detailed response, uh, to the best of my knowledge. Um, and then also if you’re enjoying these, uh, I would love for you to give a like a thumbs up on the video, just helps me so much, uh, to get this out into the world so other people will understand this and be able to give a better sales experience to their customers instead of just kinda beating up leads, uh, which is often the case. Um, and then again, if you like it, subscribe to the overall channel. Uh, we give sales training out here once a week, um, and hit that little bell and you’ll actually get instant notification when we dropped the next video. So, uh, again, hope all that helps. I’m bill rice asked me some questions and we’ll see you next time.